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Committee warns county’s spending to outpace growth for the second year in Howard

The county’s Spending Affordability Advisory Committee released its fiscal 2021 report Monday, determining that although Howard County revenue is projected to grow 2% to 3% over the next few years, expenditure requests are “considerably” outpacing that growth.

The report makes annual recommendations to the county executive for the upcoming fiscal year on revenue projections, bond authorizations and long-term fiscal outlook. This is the second year in a row the committee has warned about the county’s fiscal future.

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In its report, the 22-person committee urged the county to prioritize capital needs to create a fiscal reality that includes long-term capital planning.

“In making our recommendations, the goal of the committee is not to dent the need for or importance of county spending for programs, but to avoid incurring expenditures beyond the affordable level, in anticipation of future economic downturns and an expected reduction in revenue,” the report says.

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Currently, Howard County has a personal income tax rate of 3.2%, the maximum level allowed. The property tax rate, including the fire tax, which was raised six cents last year, is the second-highest in the state, according to the report.

The report also notes that for fiscal 2021, there is a gap of $74 million in the general fund based on expenditure requests and projected revenue. The general fund includes funding for non-school-related departments.

“Now is the essential time to look at a long-term strategic plan,” said Barbara Lawson, one of the committee members.

In February, the Howard County Board of Education advanced a $947.8 million spending plan to the county executive and County Council, a request the spending committee said would require either significant cuts to county services or major tax increases.

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“The committee continues to urge [the Howard County Public School System] to develop a budget request that acknowledges the financial realities in the county,” the report states. “All county departments and agencies are required to submit budget requests that reflect current fiscal realities and HCPSS should not be exempted.”

For the upcoming fiscal year, the committee formally recommended a $38.1 million, or 3.3%, increase from the fiscal 2020 budget. The committee came to this conclusion projecting general fund revenue of $1.19 billion for fiscal 2021.

“We have to cut back more than 50% from [capital budget] requests,” said Holly Sun, county budget administrator and chairwoman of the Spending Affordability Advisory Committee.

The committee also suggested limiting new authorized general obligation bonds in the upcoming fiscal year. The report cited the significant new debt from the financing of the Ellicott City flood mitigation plan, the new courthouse in Ellicott City and the need for a new detention center as concerns.

According to the report, limiting new authorized general obligation bonds will help preserve the county’s AAA bond rating.

With the committee’s recommendations, County Executive Calvin Ball now has until April 1 to present his capital budget and April 21 to present his operating budget to the County Council.

One of the final requests in the report is to make the Spending Affordability Advisory Committee a standing committee that meets year-round instead of just during the budget season to weigh in on economic-related decisions.

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